Germany’s largest bank, Deutsche Bank, will stop financing coal power projects and coal mining to honour its commitments under the Paris Agreement to tackle global warming.
The bank made the announcement yesterday (31 January), the same day it was fined nearly $670m for organising $10bn worth of sham trades that could have covered for laundering money out of Russia.
"Deutsche Bank and its subsidiaries will not grant new financing for greenfield thermal coal mining and new coal-fired power plant construction," the bank said.
"Moreover, the bank will gradually reduce its existing exposure to the thermal coal mining sector," it added.
The bank hailed the Paris Pledge for Action made more than a year ago at the 2015 Climate Summit in Paris.
"This emphasises the bank’s commitment to protect the climate and to contribute to the overall targets set by the Paris Agreement to limit global warming to 2 degrees above pre-industrial levels," it said.
But on the same day the bank’s reputation took a blow when US and British financial regulators fined it a total of $669m for laxity in detecting and investigating a "mirror trading" scheme among the bank’s Moscow, London and New York offices that laundered $10bn out of Russia over several years, despite warnings.
The New York State Department of Financial Services (DFS) fined Deutsche Bank $425m, while the UK’s Financial Conduct Authority fined the bank $244m (£193m), Deutsche Bank said in announcing the settlement.
Scolding the bank, DFS superintendent Maria T. Vullo said: "In today’s interconnected financial network, global financial institutions must be ever vigilant in the war against money laundering and other activities that can contribute to cybercrime and international terrorism."
Meanwhile, the trend for fossil fuel divestment appears to be gathering pace. A study last month by Arabella Advisors, a philanthropic investment advisor, found that the value of assets represented by investors committing to divestment from fossil fuel had reached $5 trillion, double the value of such assets 15 months prior.
Image: Smoke pours from a coal power plant (Jzehnder1/Dreamstime)